When financial advisors evaluate their professional associations, some see a divergence in policies, while others see opportunities to mentor the next generation of advisors.
Associations such as Advocis and the Conference for Advanced Life Underwriting (CALU) take positions on topics important to the industry. For example, in recent years, Advocis has made the case in support of deferred sales charges (DSC), title reform and advisor chargebacks on distributed funds, while CALU has lobbied on intergenerational business transfers and RRIF rules.
Meagan Balaneski, portfolio manager at Cup of T Financial Planning in Vermilion, Alta., said she found it difficult to “follow the same path” as Advocis. “I began to question their ethical behavior as they fought to remain DSC,” she said.
But Advocis is an important resource for new advisors who need guidance to become professionals, said Brad Brain, portfolio manager at Brad Brain Financial Planning and Aligned Capital Partners Inc. in Fort St. John in British Columbia
Advocis can “play a key role in the evolution of the industry and the development of the next generation of advisors by providing them with a home for like-minded people who want to be professionals,” Brain said.
Balaneski said Advocis introduced her to CALU, which focuses on advanced financial and tax planning. The association was founded as part of Advocis three decades ago and requires its members to also be members of Advocis – a requirement Balaneski disagrees with.
CALU membership requirements are at the discretion of CALU’s board and membership, Advocis said in an emailed statement.
Jason Pereira, a partner at Woodgate Financial in Toronto, said he had been a member of Advocis in previous years solely to become a CALU member, but the requirement had become untenable.
Referring to Advocis, Pereira said: “How can you claim to be advocating for the professionalization of the industry when you have done everything in your power to defend the deferred sales charge… defend the built-in remuneration, defend the commission and do everything possible to eliminate fiduciary responsibility?”
Advocis objected to the statutory fiduciary duty, arguing that the common law standard is sufficient, and against the built-in prohibition on commissions and DSC ban on the grounds that such measures would restrict access to financial advice.
“A real profession is characterized by transparency and duties of care at the highest level,” Pereira said.
He co-founded the Financial Planning Association of Canada (FPAC) in 2019, and its members – accredited planners – adhere to statutory principles, including fee transparency and fiduciary standards. One of the association’s goals is to prohibit the use of embedded compensation.
Compared to CALU, FPAC has approximately 220 members 442 (excluding associate members who are unlicensed and do not have to be members of Advocis) and approximately 10,000 Advocis (based on annual reports).
Pereira has filed a motion with CALU to review dual membership so that members can be members of CALU without being members of Advocis. In response, CALU established a task force in 2021 to review the requirement and call for applications. The task force ultimately upheld this requirement, stating, among other things, that speaking on behalf of both Advocis and CALU strengthens CALU’s support. Following the review, Pereira resigned from CALU/Advocis.
Still, the task force also recommended reviewing dual membership every three to five years.
Balaneski resigned from CALU this year, although a key part of that decision was the demands on her young family’s time. She was also studying for her trust and estate specialist qualification, which she passed this year. He remains a member of Advocis to maintain his designation as a licensed annuity insurer.
She said her preferred association became clear once she understood who she was professionally. “I am a planner and I found IAFP (Institute of Advanced Financial Planners).”
IAFP members’ primary calling is planning, and many of them have unique specialties, she said, making the association’s forum a valuable source of information.
Support in becoming a professional includes Brain, who mentors newer financial advisors and previously mentored Balaneski. Professionals obtain “appropriate” appointments, adhere to a code of conduct, commit to continuing education and are insured against errors and omissions, he said: all things required by Advocis.
He also noted that many associations do great work and differences should be accepted. “As long as advisors focus on doing what’s right for the client, it can be done in a variety of ways,” with different titles, career paths and business models, Brain said. “It all adds value.”
Saying that one association or one way of doing things is better than another is “sometimes petty” and “ego,” he added.
Brian Shumak of Brian Shumak Financial Services in Toronto said every advisor should choose the right organization for them.
He highlighted Advocis’ efforts, such as helping to separate insurance from banking to avoid bundling, as well as educational resources. “Without Advocis, I would not have had the education and financial experience,” Shumak said. Even though he doesn’t always agree with Advocis, he doesn’t expect it, he added.
Shumak also said he’s not a big fan of CALU requiring members to have a certain income level. Pereira also noted the inadequacy of income as a threshold for association membership, particularly regarding mentoring new advisors.
“Just because you make a lot of money doesn’t mean you’re doing the right thing for your client,” Shumak said.
